Mumbai: Indian equities markets Monday crept up after plummeting sharply in the morning session with a benchmark index trading 1.49 percent lower, about 90 minutes before closing bell.
Reports of India resuming talks on a tax treaty with Mauritius had triggered a panic selling in the morning market.The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 18,060.17 points, fell over 556 points to an intra-day low of 17,341.38 points.
It recovered to trade at 17,596.9 points, down 273.63 points or 1.53 percent lower from its previous close at 17,870.53 points.
The 50-scrip S&P CNX Nifty of the National Stock Exchange too followed a similar trajectory as of the Sensex and was trading at 5,284.5 points, down 1.53 percent.
The Sensex was also under pressure as key stocks, Reliance Communication and Reliance Infrastructure, fell sharply on reports of the BSE excluding the stocks from the benchmark index.
Over the weekend, a senior Central Board of Direct Taxes (CBDT) official was quoted as having said that India and Mauritius officials are expected to meet soon to work out the details of the new Double Taxation Avoidance Agreement.
India receives over 40 percent of its foreign direct investment through companies and funds registered in Mauritius.
The tax department is seeking to tax gains made by companies registered in Mauritius and operating in India.
Markets, however, cooled off after reports came in that finance ministry officials had clarified that there was no such move by the CBDT.
Broader markets continued to be under pressure, with the BSE midcap index down 2.51 percent and the BSE smallcap index down 2.63 percent.
The market breadth was negative, with 499 stocks advancing, 2,202 on the decline and 93 remaining unchanged.